Sources inside the bureau who have seen the spending audit describe it as scathing.

The audit will scold
the bureau and City Council for committing to new capital
projects—including $86 million for the Sellwood Bridge replacement and
$55 million for the Milwaukie light-rail extension—while not setting
aside enough money for basic road upkeep.

One PBOT official who
has read a draft of the audit says it describes recent spending as
“buying a widescreen TV while the roof is leaking.”

Director of Audit
Services Drummond Kahn won’t discuss the findings of the audit, which he
says will be made public in three to four weeks. But Kahn says the
audit will look at how the bureau—with a $341.5 million annual budget in
2012—manages its discretionary spending.

A second audit this winter will examine how much street paving PBOT has completed in the past four years.

“The city needs to
better prioritize its paving work,” Kahn says. “We reported in 2006 that
it costs far less to preserve existing streets before they decay than
it does to do major reconstruction work on streets once they fail.”

The audit is coming
out just as the bureau is asking for more money and new ways to raise
revenue to pay for basic street maintenance.

But the narrative
that PBOT’s spending has been poorly managed was so well-established
during the election that Hales pledged a back-to-basics approach during
his campaign.

Hales
forced out the bureau’s director—longtime Adams ally Tom Miller—two
days before Hales’ inauguration Jan. 2. He also blocked the hiring of a
public affairs manager at the bureau, a job Miller had reportedly
planned to give to ex-Adams aide Amy Ruiz.

In the coming months, Hales will need to make bigger decisions about PBOT than naming the bureau’s top brass.

PBOT’s discretionary
spending—projected at $106 million in 2012—ranges from a third to half
of the bureau’s annual budget, and is funded mostly by the state gas tax
and city parking fees.

The rest of the
bureau’s money comes mostly from federal grants and intergovernmental
agreements, which fluctuate from year to year and stipulate how the
money must be used.

WW reported in November that the bureau faces a $4.5 million shortfall in the coming budget.

A financial report Miller delivered to City Hall on Dec. 31 says PBOT needs new revenue sources for a stable budget.

In the document, a
14-member task force resurrects the perennially contentious idea of a
citywide street-maintenance fee, which would fund road repairs with a
charge added to monthly water and sewer bills.

The task force’s report—first revealed by The Portland Mercury in November—also suggests raising rates on parking meters to as high as $4 an hour during times of peak demand.

The panel says these
new funding sources are necessary because the state gas tax, which
provides much of the bureau’s budget, isn’t meeting projections.
Per-capita gas purchases in Oregon hit an all-time low in 2011
(“Choo-Choo Changes,” WW, Nov. 7, 2012).

“It
is remarkable that the city has accomplished so much on such an
antiquated revenue model,” the report concludes. “Imagine what can be
done with a revenue model that supports—rather than undermines—our
community’s goals.”

The
panel report concedes that funding the Sellwood Bridge and Milwaukie
light rail came at the cost of street maintenance, but says City Council
needed to invest in regional infrastructure.

“In honoring each
request, however, the city dramatically limited its ability to invest in
its own street network,” the report says.

Hales declined to comment on the PBOT report. “He has not read it in detail yet,” Hales spokesman Dana Haynes tells WW.